Long-Term Care: A Discrepancy
between Perception and Reality

A few statistics go a long way in revealing the mindset
of Americans toward long-term care. According to The American Health Care
Association, 76 percent of Americans do not expect to need long-term care. This
belief can be affected by a variety of factors, including a feeling of
immortality or the assumption that family will take the responsibility of caring
for an elderly adult.

However, The New England Journal of Medicine estimates
that 43 percent of people who turned 65 in 1990 could expect to spend time in a
nursing home during their lifetime. Of that number, 21 percent will spend five
or more years in a nursing home. As another way of looking at it, seven out of
10 couples will see one partner go into a nursing home. Of course, these numbers
stand in marked contrast to the vast majority who believes it will never live
with the assistance of a nursing facility.

Now let’s look at the financial impact of a nursing home
stay. In 1997, $82.8 billion was spent on nursing home care. Medicare paid 12
percent of that total, while 31 percent was paid out-of-pocket by patients. With
the current average annual cost of nursing home care now standing at $40,000,
that would mean that the patient and his or her family would pick up a bill of
$3,333 per month for long-term care expenses. Since many people do not prepare
for the expenses, it’s not hard to see why more than half the couples who see
one spouse go into a nursing home are reduced to the poverty level. The harsh
reality of long-term care expenses, coupled with the fact that the 65-and-up age
group is the fastest-growing segment of the population, means that the need for
long-term care insurance is increasing. Long-term care insurance is not always
appropriate for everyone, but generally those 65 and older are well served by
having a policy in place that would prevent adverse economic effects from being
visited on your family or other loved ones.

Certain groups of people should give special
consideration to obtaining long-term care coverage. The first is women, who
currently make up 75 percent of the over-65 nursing home population. Since women
live an average of 5 to 7 years longer than men, they are more likely to require
long-term care for an extended period of time.

Another group who may want to consider the benefits of
long-term care insurance is the children of aging parents. If nursing home care
is ever needed, children can ensure quality care for their parents, and avoid
the time, money and emotional demands of caring for an aging parent themselves.

Those with a family history of debilitating illnesses
such as Alzheimer’s or strokes should also consider purchasing a long-term care
policy, for obvious reasons. As the Baby Boom generation nears retirement and
improving health care leads to lengthening life expectancies, long-term care
will continue to be a topic on many people’s minds. To ensure quality care for
you, your spouse or family members during the twilight years without incurring a
financial burden, long-term care insurance offers an attractive solution.